Topic: Making the Wii U ... FREE?

Um... them not making any money on the console isn't the reason why making it free is a ridiculous idea. Lots of words in this thread but not much is being said

The point is that they have to charge SOMETHING. $350 is the minimum, and will be until the Wii U ACTUALLY costs less to make, or they can basically guarantee everyone buys at least 2 games with the console.

They can sell it at a loss now and still hope to make money from the console. Tech drops in cost over time so all they'd have to do is reduce the price of the console at a slower rate than the rate the tech drops. However it is a physical piece of hardware, it will never cost nothing to produce. Basically they can charge below cost now but they can't charge below cost for the life of the console.

The reason is simple, people buy consoles to play games and publishers only publish games to platforms they think they can make money from. They have to get units out as early as possible. Selling at a loss early is a good strategy. Selling at a loss for the life of the console is not because it defeats the entire point.

@skywake
They can't sell the console at a loss. It's just not gonna happen. It's stupid. It would be like trading the same ammount of gold for the same ammount of silver, based on volume. Why the heck would you do that when you can sell the gold, then buy more silver than you could of had from trading?
They'll lower the price for what the consoles worth. The difference is lowering it in increments. Any merchandise will lose value over time in material, and that could be anywhere from 10¢ to 17¢.
Losing 17¢ worth of value a day will eventually equal $50. That's when they will lower the price by $50.
Do you realize how BSy that would be to change the price of a Wii U by 17¢ every single day?
That has partly to do with the Deluxe Digital Promo, believe it or not.

Again you're creating a strawman argument, I didn't say half of the things you're claiming. All I said was that it's possible for a console manufacturer to sell a console at a loss early in the life of the console to boost the instal base. That at this point in the life of the console getting units out the door and making publishers happy is more important than the per-unit profit. Early adopters will buy games to cover any loss anyway. I didn't say the Wii U should do that and I definitely didn't say that the price should be changed daily I just said that it's a good strategy in general.

How can I say this? Well it's what Sony used for the PS3, Microsoft used it for the 360 and towards the end of the first year Nintendo used it for the 3DS. It is clearly a strategy that works. It's a very simple concept that has become commonplace in the industry, I don't know why you're trying to disagree with me.

They certainly can sell it at a loss, as they did when it first released. I'm not sure if they are making money per WiiU yet. 3DS as well was originally sold at a loss, but has (for quite some time) been profitable. As well, Sony and Microsoft sell new consoles at a loss too.

It's just looking at a long term strategy. If the only focused othe short term, the consoles would be too expensive for many potential buyers, then devs wold support them even less, and no one would have a reason to buy the machine.

I think you guys are missing the point. 3DS costs $100 to physically make. That's not including the contracts for custom parts to be mass produced exclusively. Obviously it's not that much. Nintendo pays Sharp like $5 per console to contribute to their contracting/out sourcing fee.
Wii U costs $350 to make, including all contract fees and physically making the console using custom parts.
They are making profit off of every 3DS sale, while only making $5, at most off of every Wii U sold.
Nintendo is technically giving their initial Wii U console sale profit away even still, by giving the Deluxe Digital Promo away. If you bought $350 worth of games, they give you $70 worth of Deluxe Digital $5 codes. That's still going off of that initial $5 profit off of the console. The numbers are founded by a relation between numbers. The difference between $350 and $70 is $280.
By the time you buy one game, the console has made no money for Nintendo, except the game sale. That leaves however much you paid for the game, potential for companies to figure out where it can expand.
Retail companies are the ones lowering prices on the goods, not Nintendo. Obviously, retail stores don't have confidence that Nintendo know what they are doing, much like alot of people that REALLY don't look at the numbers.
Numbers explain all this stuff in detail, but people always go off their gut feeling, and draw the conclusion that everything is either doomed, or doesn't matter.
Nintendo will always make a fair ammount of money, because they know how to. The only way Nintendo could fall out completely(Like Atari), is if someone pretty much came up with a better way to further mathematical complication that actually makes sense.
Nintendo bases their numbers off of founded relativity.

Many consoles are sold at a loss. The only one I can think of in modern times that didn't was the EDO, which had three companies wanting a profit on each console sale, pushing the cost up way too high. Considering how much profit they make of games and licensing money for third party games, consoles are not where they want to make their money anyway - sell the console at a small loss, and make big profits off the software. If they make profits form the hardware, they would make far less profits from software as they would have a fraction of the user base.

This also backs my point, that any number greater than 0(How many Wii Us have been sold thus far?), is better than zero. The difference is whether you look at a number and consider it 0 at a given point in time.
When Wii U starts having the games, features, and function people want by the end of the year, consoles will sell, but Nintendo won't count how many they are selling. That's only a concern when the games don't sell.
If the games don't sell, then they have to resort back to numbers in quantity, not relation.
So, since the Wii U's install base is arguably high, considering the lack of anything worthwhile. It will make it that much easier to grow past the launch period.
Now we just got to play the games, and see what makes them great. The games being good is what makes the numbers irrelevant.

The one major problem with making the Wii U free, or anything for that matter, is that people will just get it, use it a couple of times, and never buy anything for it again. Since the Wii U is selling at a loss at the moment, Nintendo would be throwing away millions of dollars at people who will buy only a couple of games (potentially none if they just stick to the bundled Nintendo Land).

@SCAR392
Why are you being so defensive? What did anyone in the last page say to warrant that wall of text? If you checked the topic you would notice this is a thread about a particular strategy for getting the instal base up. Selling it at a loss early in the life of the console and recovering it later on is one such strategy that has been used time and time again. Nintendo could potentially use that sort of strategy, lowering the price of the console earlier than they otherwise would have, to get more units out early.

That's it. Simple. End of thread.

Hang on... I thought the Wii U is sold at a loss (or at least was when released, don't know if manufacturing costs have fallen since launch).

I'm sure I remember Reggie saying that buyers would have to buy a new game in order for Nintendo to break even on a sale.

EDIT: Although I suspect Nintendo may have to reduce the price of the Wii U further and accept an even larger loss, although I guess we'll have to wait and see what Sony and Microsoft's pricing strategies are.

@SCAR392 Nintendo sold the 3DS at a loss for a while after the price cut. What does it making profit now have to so with anything?
Also, could you keep a straight argument with someone for once? You're always changing the subject or putting words in people's mouths thinking you're putting up this smart argument somehow, but you're not bringing anything smart by doing that at all. If you can't put up a response to someone that's actually on the matter or without claiming somebody said something they didn't then just leave it.

I understand what the thread is about. My point us that they don't need to sell at a loss, and nor should they. Why was this brought up again? I'm not even being defensive, so come off it mate.

@Jaz007
I'm not trying to be smart and putting words in peoples mouths. Your guys' explanations come off as saying Nintendo should sell at a loss. They won't do that, because they don't need to. It's seriously common sense.
The install base they gather from selling at face value, will make it easier to move forward, because they aren't taking an immediate loss, which is what would happen by selling at a loss.

This is what printer manufacturers have been doing for years. HP (any all the rest) gives away printers at cost, and make profit on the toner.

The Wii U is already free...right after you pay

Sir, you are a prophet.

PS4 selling at 399,- I presume at a loss given the tech that's in there compared to the Wii U, thus placing them nicely below Xbox One (whcih is a bummer anyways imho) so if the Wii U could settle to 299,- for the premium pack, I guess the "console environmental balance of the universe" would be re-established. What do you say?

LOL nice one, it's a bit like saying WE'RE ALL DYING, starting right after we're born.

Exactly, but then came SWISS INK and DIGITAL REVOLUTION!